If the SEC scrapped Rule 611, retail spreads could keep getting “paid” — just with a different balance sheet

On June 11, 2026, the SEC proposed rescinding Rules 611 and 610(e to remove mandatory intermarket price protection. Rule 611 is the core “trade-through” prohibition for national market system (NMS) stocks; Rule 610(e restricts locked and crossed quotations in NMS stocks.

Citadel Securities is publicly arguing that regulators should implement the disclosure framework tied to Rule 605 (order execution information) rather than make equity-market structure changes first. In a May 24, 2023 “Market Lens” post, Citadel says independent studies estimate Rule 605 updates would show wholesalers provide more than $15B in price improvement annually and argues the SEC should implement that before making changes that would re-route retail order flow.

Rule 611 is designed to keep protected quotations “sticky” across venues by prohibiting trading centers from ignoring better protected prices elsewhere. Once it’s removed, the system shifts toward broker-level “best execution” judgments and venue-by-venue liquidity incentives instead of a fixed intermarket price-protection backstop.

The SEC’s own analysis describes both an efficiency story (less complexity and compliance friction for trading centers and SOR logic) and a risk story (more off-exchange execution and potential reductions in displayed exchange liquidity). The important retail link is that broker routing decisions—especially for small retail order sizes—are already optimized around cost, fill probability, and price improvement outcomes, frequently via wholesale execution arrangements.

Two takeaways investors can use immediately. First, trade-through pressure is already highly size-dependent, so removing the backstop likely affects small-order routing first. Second, the SEC’s own table shows off-exchange trade-through metrics can be an order of magnitude more common at small sizes than on-exchange in its odd-lot construct.

Think of the equity execution supply chain in layers. Exchanges and ATSs provide quotes and displayed liquidity; SORs and broker order-handling algorithms pick venues; wholesalers (often under PFOF arrangements) supply execution responses; and retail brokers pass through routing economics to investors via pricing outcomes. The SEC proposal attacks an intermarket constraint at the exchange layer, but the economic transmission happens downstream at the routing layer.

That means the most investable question isn’t whether the trade-through rule “sounds pro-consumer,” but whether the change makes wholesaler economics more structurally entrenched for retail-size flow and whether monitoring (like Rule 605-style disclosures) still keeps brokers honest on price improvement.

This is not a claim that outcomes for every retail investor move uniformly. Instead, it’s a claim that rule removal changes the constraint set that brokers and wholesalers optimize under—so the economics of how the spread is earned can become less exchange-protected and more wholesaler/broker-driven.